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Operating Leverage at the Break-Even Point is:
AZero
B1
CUndefined (infinity)
DEqual to fixed cost
Answer & Solution
Correct answer: C. Undefined (infinity)
1. At BEP, EBIT = 0.
2. DOL = Contribution / EBIT → division by zero.
3. Hence undefined (approaches infinity).
_Source: ICAI BoS CA Inter Paper 6A, Ch 6 "Financing Decisions — Leverages", §3.1_
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